Updated September 19, 2024
In legal terminology, “gaming” almost always refers to gambling. Organizations that oversee matters related to gambling are often referred to as “gaming commissions.” Rules and regulations that apply to the gambling industry are collectively referred to as “gaming law.”
Gaming law is not a specific branch of law, per se, but can be criminal law, corporate law, contract law, regulatory law, constitutional law, international business law, competition law, or administrative law that deals with matters related to gambling. Generally speaking, “online gaming” refers to online gambling regulated by this type of law. These regulations are a major reason online gaming businesses are considered high-risk merchants. This can make it difficult to obtain merchant accounts and payment processing for online gambling.
At Zen Payments, we understand gaming merchants' frustrations and difficulties when trying to obtain a gaming merchant account. We have worked in the gaming business for years, helping online gambling and gaming merchants get set up to accept payments and avoid holds, freezes, and other issues.
What is an Online Gaming Merchant Account?
As is the case with any business that accepts payment by credit card, online gaming businesses need to have merchant accounts so that customer payments can be received and processed. Most businesses open accounts at a traditional bank. However, traditional banks and payment processing companies tend to be reluctant to provide services to businesses that are considered to be high-risk.
Unfortunately for operators of online gaming businesses, the online gaming industry is considered high-risk.
What Makes an Online Gaming Account High-Risk?
Why is online gaming viewed by banks and other financial institutions as high-risk? The two most common reasons that a company is labeled “high-risk business” are a high chargeback rate and a high frequency of fraud. Both apply to online gaming, which alone would place it in the high-risk category.
There are other aspects of online gaming that make traditional banks and payment processors hesitant to provide a merchant account, as well. Although defined in part as a type of entertainment or leisure activity, most forms of gaming are considered by the general public and the legal system to be gambling. Along with the mixed image that gives to gaming, gambling is illegal in some states and other areas of the world. The complicated legality and regulations for everything from online bingo fantasy games to online casino esports make traditional payment processors wary of online gambling companies.
New Technology Means New Benefits and New Risks
In addition, although gambling itself has been around for many centuries, online gambling did not even exist in any meaningful form three or four decades ago. It was made possible by the creation of the Internet, which, despite now being widespread and a normal part of everyday life, is still a very new technology that continues to change dramatically. Among other things, this means that new security measures are being developed and implemented all the time.
On the other hand, the newness and rapidly occurring changes introduce new risks and vulnerabilities. If they are not eliminated, or at least reduced as much as possible, the business, the payment processor (such as the bank providing the merchant account), and other people connected to that network could suffer a significant loss. This also contributes to why online gaming merchant accounts are considered high-risk.
Requirements for Online Gaming Merchant Accounts
This, of course, means that online gaming merchants need a high-risk merchant account to accept payments. You will need to find a payment processor willing to take on clients who are high-risk businesses and have the knowledge and experience in high-risk payment processing. Also ensure they have the infrastructure for underwriting high-risk clients, and the technological tools needed to provide timely and reliable payment processing services and a gaming merchant account. Some of the tools you should look for when choosing between online gambling merchant accounts are listed below:
Geofencing
One of the features that you will most likely need is geofencing. Geofencing is a function that is built into a program or application and uses the global positioning system (GPS) or radio frequency identification (RFID) to set geographical boundaries and detect whether a device is inside or outside the defined boundaries.
Because laws and regulations related to online gaming can differ drastically between cities, states, and countries, every online gaming business needs a way to limit the areas from which their services can be purchased or used. Geofencing can be used to deny services automatically when an attempt to access them is made from a device that is outside an area you have authorized.
There are, of course, ways to prevent detection, but at the very least, geofencing can make it enough of a bother that the person attempting to access your services inappropriately will move on to his or her next target.
PCI Compliance
You also need to make sure that the account is PCI-compliant. The Payment Card Industry Data Security Standard (PCI DSS) is a set of requirements for companies that process, store, or send credit card information. The purpose of the PCI DSS is to make sure that those businesses maintain a secure environment for that work.
You can find more information on PCI compliance and what you need to do to be PCI compliant here. Our staff at Zen Payments would be happy to answer your questions as well. We have years of experience setting up gaming merchants with an online gaming merchant account and understand the rules and regulations. We'll work to keep your merchant account and payment processing PCI-compliant.
Zen Payments Has the Expertise to Help You Navigate New Terrain
A high-risk payment processor can be a highly effective resource in getting your business off on the right foot. We'll also work to strengthen your protection against risks that could do serious damage. If possible, find a high-risk payment processor that is experienced in the gaming/online gaming industry.
That's where we come in. Choose Zen Payments to help you get set up with an online gaming merchant account to accept credit card payments. We not only have expertise in the online gambling industry, but we also offer some of the highest acceptance rates and lowest fees in the merchant account business. We work with over 15 partner banks, so you know we'll find the perfect partner for your online gambling platform. When you set up a gambling merchant account or multiple merchant accounts with Zen Payments, you can rest assured you'll have a partner you can trust.
Don't hesitate to ask questions or to see what other payment processors have to offer in both services and expertise. Your business and the payment processor will both benefit from ensuring that your needs and the processor's abilities are a good match. Ultimately, we know you'll find that Zen Payments is unmatched when it comes to providing high-risk merchant accounts.
Whether you are still trying to figure out exactly what you need to do or you have already decided to use a high-risk payment processor, Zen Payments can answer your questions and provide solutions that meet your specific needs.